Orlen and ZAK join move to end Poland gas monopoly

02 September 2011 17:30[Source: ICIS news]

LONDON (ICIS)--PKN Orlen and Zaklady Azotowe Kedzierzyn (ZAK) have booked cross-border capacity on an interconnector set to link the Polish and German gas grids as momentum builds in the Polish chemical industry’s move to end reliance on Poland’s PGNiG gas monopoly, the two companies said on Friday.

In August fertilizer and titanium dioxide (TiO2) producer Zaklady Chemiczne Police (ZChP) became the first Polish chemical producer to book capacity on the 1.5bn cubic metres/year link, which from January should provide an alternative to importing Russian gas delivered by PGNiG from the Druzhba pipeline running from Russia.

Orlen – which did not specify what proportion of its gas demand could be covered via the interconnector – was also expected to look at importing some of its future gas supplies from a liquefied natural gas (LNG) terminal that Poland was constructing at its Baltic Sea port of Swinoujscie, noted investment bank WOOD & Company.

Refining and petrochemicals group Orlen, including its nitrogen fertilizer unit Anwil, is one of ?xml:namespace>Poland’s largest industrial users of natural gas, consuming around 1.2bn cubic metres/year, the bank said.

“We believe it is inevitable that Poland’s large industrial users will migrate to alternative suppliersor direct imports when the market deregulates and infrastructure will allow it,” said Robert Rethy, an analyst at the bank.

Nitrogen fertilizer and oxo-alcohols producer ZAK said it intended to cover 10% of its gas demand of 400m cbm/year through the interconnector, which is being built by Polish gas transmission operator GAZ-SYSTEM at Lasow in Lower Silesia, southwest Poland.

ZChP, which like ZAK is a member of the Zaklady Azoty Tarnow group, also plans to bring in 40m cbm/year of gas via the interconnector, which would be 6-7% of its annual requirement.

GAZ-SYSTEM added that before the opening of the Polish-German interconnector, it hoped to launch a new interconnector between Poland and the CzechRepublic in September, which would enable the transport of around 0.5bn cbm of gas per year.